Louisiana Legislature Passes Auto Accident ‘Tort Reform’ Bill

June 2, 2020

Wrapping up a regular session shortened by the coronavirus pandemic, Louisiana’s Legislature gave the state’s business lobby a long-desired goal and one that Republicans made their signature push for the session: passage of a bill to change the rules for car accident lawsuits that would limit damage claims against insurance companies and other businesses.

It’s uncertain whether Gov. John Bel Edwards will sign the legislation.

The House voted 66-31 on June 1 for the final version of the “tort reform” measure, Senate Bill 418, by Republican Sen. Kirk Talbot of River Ridge, and the Senate passed it with a 28-10 vote.

GOP leaders negotiated with Edwards’ administration trying to keep the Democratic governor from vetoing the bill, but it was unclear if the changes were enough to satisfy Edwards.

“We just couldn’t come to an agreement (on everything), but that wasn’t for a lack of trying,” Talbot said.

Supporters say reworking the civil litigation system — to cap certain damages that could be awarded and limit when insurance companies can be sued directly, among other changes — would force down Louisiana’s car insurance rates, which are second-highest in the nation. They say Louisiana’s legal climate encourages too many lawsuits.

Opponents say the changes would keep people from getting money needed to cover their medical bills and could drive up costs for courts. They note the bill doesn’t force insurance companies to lower premiums.

The measure assumes insurance companies would drop premiums for private passenger policies by 10% a year after the changes take effect in 2021. But it includes a provision allowing companies to avoid rate cuts.

The proposal would require use of jury trials more frequently, so lawyers have to argue damage claims to more people than a single judge; cap certain damages that can be awarded; limit when insurance companies can be sued directly; and increase the time accident victims can file lawsuits to provide more time for settlement negotiations.

The House and Senate opened a 30-day special session immediately after adjourning the regular one, to finish work on a $30 billion-plus spending plan for the financial year that begins July 1 and to consider tax breaks for businesses struggling amid the virus outbreak.

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